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Banque de France and Banque centrale du Luxembourg have published the results of Project Venus

25.06.2024
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Banque de France and Banque centrale du Luxembourg have published the results of Project Venus, a successful 2022 experiment demonstrating the use of Distributed Ledger Technologies (DLTs) in digital bond issuance and settlement. The project was conducted in November 2022 with the European Investment Bank (EIB), Société Générale, Santander, and Goldman Sachs.

Project Venus was the first successful tokenised EIB bond issued on a private DLT, listed on a stock exchange and settled in central bank money with a wholesale Central Bank Digital Currency (wCBDC) solution. It highlighted the potential for wCBDC and DLTs to improve access, security, and efficiency of digital capital markets.

Key takeaways:

No.1: Safe and efficient settlement:

  • Using a tokenised representation central bank money (CeBM) in Euros eliminated risks associated with other tokenised settlement assets.
  • Project Venus proved that wholesale CBDC could enhance resilience and security of digital capital markets.

No.2: Accelerated issuance process:

  • Traditional issuance can take up to T+5 days, but project Venus achieved same-day settlement.
  • This T0 settlement cycle reduces counterparty risk and increases liquidity.

No.3: Secure interoperability between DLTs:

  • A Hashed Timelock Contract (HTLC) mechanism enabled atomic settlement between the cash DLT provided by Banque de France and the security DLT provided by Goldman Sachs, ensuring secure interconnectivity without requiring securities and cash accounts to be on the same platform.

No.4: Inclusion of non-bank entities:

  • Credit institutions could open sub-wallets in the cash DLT for their investors, allowing broader market participation with only limited cash management requirements.

No.5: CBDC interoperability:

  • The project demonstrated a model in which different DLTs can coexist and interact with wholesale CBDC, supporting the digitalisation of assets.

No.6: Future exploration needed:

  • While project Venus was a milestone, further experimentation and policy work are required before deciding whether to issue a wholesale CBDC. The Eurosystem is conducting additional experiments and trials, with conclusions expected by mid-2025.